No, that's not the article.

here's the full link: http://www.heise.de/newsticker/Erster-Blick-auf-die-PSP-3000--/meldung/114603
and the google-translated version:http://translate.google.com/translate?u=http%3A%2F%2Fwww.heise.de%2Fnewsticker%2FErster-Blick-auf-die-PSP-3000--%2Fmeldung%2F114603&sl=de&tl=en&hl=en&ie=UTF-8

The juicy stuff is the fifth paragraph:

(german) Reeves erklärte die neue Abwärtskompatibilität zu PS2-Singstar-Titeln genauer. Sie werde mittels einer Software-Emulation realisiert, die in einem kommenden Firmware-Update enthalten sei. Mit diesem ließen sich alle PS2-Singstar-Folgen direkt auf der PS3 abspielen. Man benötige kein PS3-Singstar. "Wir beobachten, bei welchen Titeln sich dies noch lohnen wird, und werden in Zukunft möglicherweise weitere PS2-Spiele auf der PS3 per Emulation zum Laufen bringen." Dies sei jedoch ein technisch sehr aufwendiger Prozess, weil die nötigen PS2-Chips den aktuellen PS3-Modellen fehlen.

(english) Reeves said the new backward compatibility with PS2 SingStar titles accurate. It would be using a software emulation realized in a future firmware update. This could all PS2 SingStar impacts directly on the PS3 to play. One need not PS3 SingStar. "We observe, in which titles are still worthwhile, and are likely to be more PS2 games on the PS3 up and running by emulation." This was, however, a technically very complex process because the necessary PS2 chips PS3 the current models are missing.

The bolded portions strongly indicate this is indeed SW emulation of the PS2 and not simple disc-swapping. I wonder if they were planning on doing this anyway in future hardware revisions, but they had to jump the gun and phase out the 60GB early because of the abysmal sales last year. It kind of makes sense if you think about it. Either way, as long as this is true and more than a handful of titles (a la Xbox 360) are supported, I think Sony will do very well this holiday season.

Its the rough engrish parts that make me wonder about the bolded. It does definately seem to strongly sugegst that the two statements are different. but I have a small lingering doubt until I see a better translation.

BC via software download for Ps3 is great news. Ps3 BC will be much cheaper.

I feel compelled to defend myself on a couple of fronts.

It is also how it appears to be reported elsewhere:

http://arstechnica.com/journals/thumbs.ars/2008/08/21/singstar-ps3-to-get-ps2-compatibility

http://kotaku.com/5039439/ps3-firmware-update-lets-singstar-owners-rip-ps2+only-tracks

http://www.joystiq.com/2008/08/20/gc-2008-new-firmware-to-rip-ps2-singstar-tracks-to-ps3/

http://www.eurogamer.net/article.php?article_id=219907

http://www.n4g.com/News-187335.aspx

I have not seen any story say that this was anything more than a way to let people play their tracks from the PS2 on their PS3 -- even if the PS3 was not BC. It is essentally what Rock Band 2 will let owners of Rock Band 1 do.

Also, I would be very leery of relying on Google translation for the news because this seems to be the only place saying that you won't need PS3 Singstar.

Taking the leap that this is the beginning of a new BC for Sony is a great leap of faith. Sony may have that up their sleeve and it may be coming. But it is doubtful that it will seen until its PS2 cash cow stops selling. And that may not be until the PS4 arrives.

Mike from Morgantown

if they do this and get a meaningful support going for most games I'll probably import a silver PS3 from japan and sell my old 60Gb model.. I love the silver PS3... Plus It'll look great, White Wii Black 360 Silver PS3!

Sadly though it doesn't look like that will happen for at least a while longer; ;

I can't wait!

If they bring it back by 2011 that's when I'll buy the PS3, if not I'll never buy it, BC even if it's software with 80% compatibility is a huge issue for me, and i will NOT buy a PS3 without it. I have 70 or so PS2 games and don't want to abandon them in an upgrade cycle by having to disconnect my PS2 (i have too many systems set up now).

ok. I asked a friend of mine who speaks german to do a better translation of the paragraph in question. Here it is:

Reeves explained the new downward compatibility to PS2-Singstar titles in more detail. It will be realized with a software emulation which is contained in a coming firmware update. With this, all PS2-Singstar episodes would be directly playable on the PS3. There is no need for a PS3-Singstar. "We will observe for which titles this would also pay off, and in the future we will possibly get other PS2-games to run on PS3 by emulation." This is however a technically very complex process, since the necessary PS2-chips are missing in the current PS3-models.

I think the early ps2 games would be rather easy to emulate, it is the later ones like FF12 and GoW2 that really pushed the hardware that they will have trouble with emulating. I think they have would have kept this hush hush until they can play the more demanding games like those two because if they can get games like those two playing they will be able to run 90% of all ps2 games.

My PS3 has BC, so this effects me in no way.